I. The Economic System,
the Environment, and Policies

A.Economic System
- Set of institutions that constrain, facilitate and coordinate economic
behaviors.

B. Institution
- Organization, practice, convention or custom that is persistent and
material in society.
Alternatively, according to
Douglass North, "Institutions are the humanly devised constraints that
structure political, economic, and social interaction. . . . Throughout
history, institutions have been devised by human beings to create order
and to reduce uncertainty in exchange."

C. Environment
- Factors that cannot be manipulated by policy makers. These include natural resources, which, in principle, should be helpful to the economy, but can lead to a "resource curse," which may have political origins (magnet for corruption and lack of citizen involvement when taxes are not needed) and/or economic origins (lack of diversification because of labor/capital attraction and exchange rate distortion).

D. Policies
- Factors that can be manipulated in the medium term to influence economic
performance.

3.
Socialism -
Means of production owned socially, by the government, cooperatives,
communes, or workers' councils.

If the artificial intelligence and robotics revolution causes a major substitution of capital for labor (more and more jobs that currently are performed by wage earners are performed by machines that are owned by investors), what happens to the already-uneven distribution of income between wage-earners and owners of capital?